GENERAL COMMENTS: Lean hog May through December futures posted gains of $2 to $4.40 per cwt Wednesday on anticipation of a China trade deal. Cattle markets eroded as technical pressure combined with expected cash and wholesale beef weakness. Light cash cattle trade started to develop Wednesday in Texas and Kansas at $124 per cwt, generally $1 lower than last week. A few cattle are reported sold in Iowa at $205 per cwt, but the majority of Northern trade is still holding onto bids of $203 to $204 per cwt. Asking prices still remain near $127 and higher live and $207 to $208 dressed. Additional trade is likely to be seen in all areas through the rest of the week. The National Daily Direct afternoon hog report was $0.61 higher ($67-$78.50, weighted average $75.89) on 10,041 head sold. Corn futures were higher in light-to-moderate trade with May up 1 1/2 cents per bushel. The Dow Jones Index was 27 points higher with the Nasdaq up 41 points.
LIVE CATTLE: Traders continued to back away from previous support in live cattle trade Wednesday. Futures settled mixed, $0.65 lower to $0.25 higher. Though spring 2020 contracts posted narrow gains, nearby contracts were down. The June contract closed at $119 per cwt, just slightly above the support level set in early March. A move below this level has already developed in the April contract, and technical pressure is starting to redevelop in most other contracts. Traders are also focusing on weakness in cash and wholesale beef values, which may add to late-week softness in the futures trade. Beef cut-outs: higher, up $0.48 (select, $218.97) to up $0.41 (choice, $226.14) with light demand and light offerings of 141 loads (82 loads of choice cuts, 19 loads of select cuts, 5 load of trimmings, 36 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady to $1 lower. Bids and asking prices are expected to redevelop Thursday morning, but limited trade seen midweek could curb active support and spark additional market weakness through the end of the week.
FEEDER CATTLE: Feeder cattle closed $0.10 to $0.90 lower. The lack of support in the complex continues to bring sellers to the market as expected cash cattle and beef value weakness is adding even more uncertainty. Strong premiums in summer and fall contracts are adding even more momentum to the market softness. The August contract traded at a $10 per cwt premium to April. Firming corn prices also added to softness in the cattle complex, as higher feed prices will raise production costs. The CME cash feeder index for 4/1 is $142.44, up $0.06.
LEAN HOGS: Hog futures rallied again Wednesday on expectations for a trade deal with China. Futures closed $0.12 to $4.40 higher. Support swept through all nearby contracts -- except spot April -- as traders focus on the potential for strong buying to be seen in summer and fall contracts. Most of the gains over the last two weeks have been based on expectations that a trade deal with China is in the home stretch, with a break from the trade war thought to be extremely good for the pork industry. It is still uncertain what details will be in any trade agreement if and when it develops. But with African swine fever reducing Chinese pork production, all signs point to more U.S. pork moving to China, at least over the short term. Pork cutout prices tumbled lower with multiple primal cuts recording sharp price reductions. Pork cutout values fell $1.45 per cwt, moving to $80.26 per cwt on 287 loads. CME cash lean index for 3/30 is $76.78, up $0.98. DTN Projected lean index for 4/1: $77.70, up $0.92.
THURSDAY'S CASH HOG CALL: Steady. Light pressure is expected to redevelop Thursday morning despite recent futures support. Packers continue to focus on short-term direction in pork values, limiting cash support through the end of the week. Thursday slaughter is expected at 477,000 head. Saturday runs are expected at 145,000 head.
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